Forex Glossary

Account – the record in the database, which contains information about user and other objects of
the system.

Arbitrage – the transfer of funds from one market to another to profit from the difference in
interest rates, exchange rates or commodity prices.

Ask – the price at which you can buy currency. Ask price is bigger than Bid price.

Aussie (AUD) – the slang term for Australian dollar.

Automated trading – the method of trading when special programs execute orders on the trader's
behalf, based on a particular system, but without the participation of the trader.

Balance – the sum of funds on the trading account after finishing the last transaction at a
certain period.

Base currency – the currency that stands first in the currency pair. All transactions are made
with base currency.

Bear – the trader, who counts on the devaluation of currency.

Bid – the price at which you can sell currency. Bid price is lower than Ask price.

Broker – an individual or company who takes responsibility to be an agent between a buyer and a
seller of financial instruments, while charging a fee (commission charges).

Bull – the trader, who counts on the rise in the exchange rate.

Buy limit – pending order to buy at a price lower than the current price level (buy cheaper than
now). It is placed with the expectation that the price will drop to a certain level and then will start increasing
again.

Buy stop – pending order to buy at a price higher than the current price level (buy more
expensive than now). It is placed with the expectation that the market price will reach a certain level and will
continue to grow.

Cable – the slang term for pound. It is called this way because the first quotations were sent to
America by a trans-Atlantic cable in the middle of the 19th century.

Candlesticks – one of the methods of displaying charts of financial instruments' rate changes.

Central bank – a bank that provides financial services to the government and the commercial banks
of its country.

Cross currency pairs – currency pairs that do not include USD. For example, EUR/JPY.

Currency pair – financial instrument, that is traded on the foreign exchange market. Currency
pair is formed by two currencies, which are written as a ratio of one to another. For example, USD/JPY. The result
is called the exchange rate or a quotation.

Day trading – trading operations that are completed within a day.

Dealer – an individual or company, with whom a trader has an agreement, governing the basics of
trading operations. The dealer takes the responsibility to act as a second part of the transaction.

Deposit – funds put on the account for further transactions.

Diversification – a strategy, that aims to reduce risks by allocating investments in different
financial instruments or objects of investment.

Flat – a period, when the price stays within the same range and does not express the direction of
growth or decrease.

Fundamental analysis – a type of market analysis, where the forecast is based on news of
financial market; an analysis of economic and political information to predict market movements.

Gap – the breaks on the quotation graphs caused by a mismatch between the open price of one
trading period and the close price of the previous trading period. This may take place because of unforseen
circumstances (e.g., after the weekend).

Hedging – the use of one financial instrument to reduce risk, which is connected with the
influence of unfavorable market factors on the price of another financial instrument, associated with the first
one or the cash flows that they generate.

Indicator – the tools of the computer analysis of price movements on the basis of statistical
data used in technical analysis.

Instant Execution – the method of order execution, where the order is executed at the price
indicated. If the price changes while getting to the trading server, the client gets a notification about the
price change (requote). The trader can either accept the new price or refuse the order to be executed.

Kiwi (NZD) – the slang term for New Zealand currency (New Zealand dollar).

Leverage – an instrument that lets one trade bigger sums, having only a part of the sum. For
example, with a 1:100 leverage, you can conduct a trade of a USD 100 000 volume, having only USD 1 000 of your own
funds.

Liquidity – the feature of one asset to change for another one. A bigger liquidity gives an
opportunity to make a big deal without being affected by a significant change in price.

Lock – the presence of two positions of one financial instrument open in opposite directions at a
time.

Long – the position to buy. Its profit increases when market price grows.

Lot – a certain amount of units or the sum of assets used for executing the trade of a certain
instrument (for currency pairs, one standard Forex lot is 100 000 units of the base currency).

Margin – the guarantee required to execute trade with the help of leverage. For example, if the
leverage is 1:100 and the volume of order is USD 10 000, the margin is USD 100.

Margin call – a notification that shows that little amount of funds is left on the trading
account and that in case of unfavorable market movement, stop out may take place. This notification is sent at the
moment when the remaining funds on the trading account is a certain percent from the margin (for example, 40%).

Market Execution – the method of order execution, where the order is executed in any case. If the
price changes at the moment of order execution, it will be executed at a new, changed price.

Market-maker – a large bank or financial organization, that determines current currency rates
because of the major part of its operations in the whole market's volume.

News trading – a type of trading system, the essence of which is in receiving profit on the price
gaps at the moments of important economic news release.

Non-market quotation – a quotation that matches the following conditions:

the presence of significant price gap;

the return of price within a short period to the initial level with price gap formation;

the absence of fast price dynamic before the appearance of this quotation;

the absence of important economic news, which considerably influence the rate of the financial instrument, at
the moment of the appearance of the quotation.

Order (position) – client's instruction to execute trade at a specified rate (to buy or sell one
currency for another one). After the order is opened, it must be closed to fix the profit or loss.

Order (position) closing – the process of reverse selling/buying such volume of financial
instruments, which compensates for the bought/sold volume of the opening position.

Order (position) opening – the process of buying or selling certain volume of financial
instruments, for profit because of the changes in quotations in the favorable direction. To fix trading results,
you need to close the order.

Pending order – an order to buy or sell financial instruments in the future, when the price
reaches the level, indicated in the order.

Pips (points) – the unit of financial instrument price change (0.0001). For example, if the
quotation changes from 1.3000 to 1.3001, this means that it changes for 1 pip (point). The fractional unit of
price change is used on the NDD and ECN accounts, which means that the quotation can change on 0.1 pips and will
look like 1.30011.

Profit – a positive increase in balance, resulting from investment or trade, after deducting all
expenses.

Quoted currency – the currency, that stands second in the currency pair. The price of the base
currency is reflected with the help of it.

Resistance level – the term of technical analysis, which determines the level at which market
participants often start selling.

Requote – a notification in the trading terminal about price changes during the process of
placing an order. You can either accept a new price or cancel the execution of the order. Requotes can appear on
the accounts with Instant Execution.

Scalping – a trading strategy, where a trader executes a big amount of orders during a short
period (even a couple of seconds) and fixes profit in several pips.

Short – a position to sell. Its profit increases with the decrease of the market price.

Slippage – the amount of market movements from the time of placing an order until its execution.
It is the situation when orders execute at a better/worse price, than the one indicated in the order. For example,
this might happen during high market volatility.

Sell limit – pending order to sell at a price higher than the current price level (sell more
expensive than now). It is placed in with the expectation that the market price will increase up to a certain
level and then will begin to fall.

Sell stop – pending order to sell at a price lower than the current price level (sell cheaper
than now). It is placed with the expectation that the market price will decrease up to a certain level and will
continue to fall.

Spread – the real time difference between the Bid and Ask prices of one currency for another one.

Stop out – the process of automatic order closing. This procedure takes place at the moment when
the remains on the trading account is a certain percent from the margin (for example, 20%).

Support level – the term of technical analysis, which determines the level at which market
participants often start buying.

Swissy (СHF) – the slang term for Swiss franc.

Swap – fee for the transfer of open trading position through the night. Funds may be deducted or
added from/to the account.

Take profit – a type of pending order, that helps fix (take) profit while trading.

Technical analysis (graphical analysis) – a type of market analysis, where forecast is based on
the fact that the market has memory and future changes will be influenced by patterns of its behavior in past.

Тrailing stop – an instrument, that "pulls" stop loss level to the current price at a certain
distance untill the market turns and passes it. It is helpful during strong one-way price movement.

Trading platform (trading terminal) – a trader's software, that lets execute trade from the
computer or another telecommunication device.

JustForex is a retail Forex broker that provides traders the access to the foreign exchange market and offers great trading conditions on accounts such as Cent, Mini, Standard, ECN Zero, a wide choice of trading instruments, a leverage of up to 1:3000, tight spreads, market news, and economic calendar.

Please note: we do not provide services for U.S. residents and entities of any kind. Margin trading on the Forex market is speculative and carries out a high level of risk, including full loss of deposit. You must understand this and decide by yourself whether this type of trading fits you, considering the level of knowledge in a financial area, trading experience, financial capabilities and other factors.